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As more than a quarter of a million Queensland construction workers reach what must be one of the most anticipated and well-deserved Christmas shutdowns for a very long time, we at Helix also reflect on the new regulatory challenges that lay ahead for the industry in 2022.
The Private Sector phase of the new Project Trusts regime is upon us and from 1st January 2022, all eligible private projects valued at $10 million and over will be subject to the Trusts regulations. There has been a flurry of activity in the last few weeks to try and beat the deadline with compromises reached and deals done to try and get large project contracts signed before the end of the year (and, therefore, avoid the new requirements). Keen industry observers understand why Builders and Developers would be motivated to, at least, put off having to deal with the complexity and impact on working capital as long as possible.
On 1st December at our “Trusts are a Reality, Are You Ready?” event in front of a sell-out audience of more than 100 industry stakeholders, Helix experts delivered their perspectives on the industry challenges and level of readiness for Trusts and the new Helix Compliance Trusts learning resource digital platform was launched. You can watch the video recap of the event below!
With the precision of a heart-surgeon, Janelle Kerrisk picked apart the new regulations and laid out in plain English what, when and how the new laws will affect Builders, Subcontractors and Developers. At last, we have an authoritative business leader ready to call a spade, a spade. Project Trusts are really, really complex but it doesn’t have to be that way.
I delivered my Building firm Chief Financial Officer’s observations on the likely financial implications of Statutory Trusts across the industry. In a business sector that contributes $27 billion of Queensland’s GDP, it is forecast that within 2 short years there will be 3,500 construction projects operating under the new regulations – currently there are just 125 projects affected. By December 2023, I forecast that each month $2 billion of cash will be passing in and out of Trust Bank Accounts in countless thousands of transactions. Almost $1 billion of cash that would have been available to Builders’ in their day to day working capital accounts will be sitting ringfenced in myriads of Retention Trust Bank Accounts while at the same time, their own retentions funds continue to sit in the bank accounts of Developers and Government departments.
I believe that with the right planning, use of innovative solutions such as the Helix Compliance tool that trains and empowers our back office teams, the industry will adapt and even thrive in this new regulatory environment.